Late last year, Forbes published my annual list of predictions for the healthcare industry. As we move into the second half of the year, it seems appropriate to assess which have come true, which might come true, and which were way off the mark.
Looking at what I wrote, some common themes emerge. Many of them tie back to leadership. Healthcare is filled with executives and administrators. But leaders? People who not only can but are determined to drive innovation that puts patients over profits? People who are willing to look at their own companies — or even their work — and say, “We’ve missed the mark?”
I hope that people will look at these predictions and be inspired to break with the status quo and use their influence and power to lead their organizations toward a place where success is measured in patient outcomes, not quarterly earnings.
Having said that, let’s look at how I did.
Prediction: Medicare Advantage Will Remain Under a Microscope
In 2022, my mentors Don Berwick, MD, and Rick Gilfillan, MD, intensified their argument against Medicare Advantage, writing in Health Affairs that the program was “distorting health care delivery,” among other charges.
I predicted that their article was the opening salvo on a broader front against Medicare Advantage, and it looks like that’s come true. In April, the Centers for Medicare and Medicaid issued a set of rules that will curb payments for certain diagnoses, with the stated goal of preventing overpayments to MA plans.
The microscope under which Medicare Advantage is being looked isn’t going away. More than 50% of beneficiaries now choose Medicare Advantage coverage. It’s time for federal reform and for Medicare Advantage leaders to get out of their defensive crouches and rise to the challenge of becoming irrefutably and consistently better for Medicare beneficiaries.
Prediction: A Private Equity and Venture Capital Feeding Frenzy of a Different Kind
I predicted that the era of countless, cleverly named startups, each promising to treat a single condition, would come to an end. With rising interest rates and less capital to spread around, venture capital firms couldn’t continue to give such companies an unlimited runway to achieve profitability.
This one is also coming true. As Gabriel Perna reported recently in Modern Healthcare, “Companies once deemed unicorns have had to lay off employees, sell lagging businesses, and even file for bankruptcy.”
But that doesn’t mean startups are going away. And nor should they, although we likely need fewer companies targeting single conditions. Bankruptcies and fire sales are in progress and the real winners in this race will be holistically oriented organizations that can truly address the broad array of conditions that patients experience.
Prediction: More and More Customer Segmentation
The idea that all patients benefit from the same clinical model is being fundamentally questioned by companies that are segmenting their offerings to serve diverse populations.
The number of companies doing this seems to be growing rapidly. In Texas, Suvida Healthcare serves Hispanic seniors. In the Midwest, Zing Health offers MA plans targeting the needs of Black seniors. And Plume offers care for transgender, nonbinary, and gender non-conforming people in markets across the US.
In my original article, I wondered whether these segmented offerings would be viable in the long term. The answer appears to be yes. My company’s Affirm plan, the first MA plan for LGBTQ+ Older Adults, saw three times as many signups during last year’s annual enrollment period as we were expecting.
Why the demand? Because healthcare is very personal. Yes, people want physicians and nurses who are clinically competent. But they also want clinicians who are culturally competent and understand the intimacies of their lives without explanation.
Our next step shouldn’t just be to expand our offerings. It should be to build them up so they’re not atypical. That means investing in marginalized communities so their members can go to medical school and nursing school and get the training they need to serve the communities where they grew up. The more we broaden medicine in this way, the more effective its practitioners will be.
Prediction: Toxic Positivity Around Value-Based Care Will Abate
Six months ago I argued that the term value-based care was nothing but a cover for health systems, medical groups, insurance companies, pharmaceutical companies, device manufacturers, and others to say they’re moving toward some sort of outcome-based payment system when in fact they’re really preserving the status quo and working as hard as ever to get more healthcare dollars on their income statements.
I can’t say value-based care is going away — and you’re hearing this from a guy who recently made Pearl Health’s list of the Top 50 Value-Based Care Thinkers for the second year in a row — but there are signs people may finally be calling out the empty promises around the concept for what they are. We all want to deliver value-based care. That should be our aspiration and our destination. Maybe more questioning of what it actually means will lead more organizations to get there.
Prediction: Home-Based Care Will Get a Closer Look
I’ve built and led home-based care models at several organizations. But that didn’t stop me from predicting that healthcare organizations would start to take a more nuanced look at home-based care and realize that while it has its place, it isn’t for everyone.
I’m not seeing a lot of organizations putting the brakes on their ambitions for home care. It’s still being touted as something of a panacea. Yes, home care has its place, and technologies that exist now and are in the pipeline make home care highly effective for many patients.
But not all patients. In many cases, patients need wrap-around services and highly specialized environments that can only be delivered inside medical facilities. That’s why it alarms me when I read about rural hospitals closing — a trend that is sure to leave poor and marginalized communities without the care they need. Home-based care might help with some of the loss, but it can’t do it alone.
Prediction: Biopharmaceutical Innovation Will Continue to Impress at Prices That Won’t
My prediction here was only half-right. On the one hand, Vertex and CRISPR Therapeutics are set to launch a one-dose treatment for sickle cell disease, which affects African Americans at very high rates. The cost: somewhere close to $2 million, according to this report.
At the same time, the federal government appears to be stepping in to lower costs. The Inflation Reduction Act includes several provisions that will reduce the cost of drugs for Medicare beneficiaries. These changes are long overdue. It would be nice to see leaders in this field step up and not just develop innovative therapies, but also innovative ways to make them affordable.
Prediction: Tech and Retail Will Continue to Inch into Healthcare Delivery
The key word in this prediction was “inch.” Amazon’s acquisition of One Medical, CVS’ acquisition of Oak Street, and Walmart’s partnership with UnitedHealth are all examples of how retailers continue to pursue revenue in healthcare.
The problem is that they don’t necessarily know how to do that — or do it quickly. That’s mostly because healthcare is so different from retail. Comparisons between the sectors fall apart quickly. Physicians can’t predict the exact timing of care the way Amazon tells you when your book will arrive. And as any doctor who’s had to deliver a difficult diagnosis knows, we can’t make you smile every time you visit us the way Ritz-Carlton aims to.
What’s more, retail is built around a point-in-time delivery of products and services. Healthcare doesn’t work that way; it’s a continuous series of interactions and events that often don’t have defined outcomes.
Nevertheless, with healthcare now controlling 20% of our gross domestic product, no one should expect retailers to stay away. But don’t expect them to rush in either.
Which is too bad. I suspect that when established retail operators acquire a health property piecemeal, they fail to see the totality of what healthcare is. I’m convinced that a giant like Amazon or Apple taking over a full health system — with a payer, provider, and hospital network — would enable them to apply technology and design thinking to revolutionize the patient experience.
Prediction: Greater Recognition That We Have a Leadership Crisis in American Healthcare
Look at this list and you’ll see over and over again that so much of what needs to be done in American healthcare cannot happen by policy changes alone. Six months after writing this list, I still believe the best medicine for our system is leadership — a consistent commitment to doing what’s right for patients. And that will only happen because of bold leadership.
Leadership academies and organizational training can all help the industry better align its leaders’ ideals with how they steer their companies. My hope remains that even if 2023 isn’t the year we get healthcare exactly right, it will be the year in which we begin to have an important conversation about changing the culture of leadership in U.S. healthcare.